South: Insolvency association advises businesses hit by COVID-19
R3, the insolvency and restructuring trade association, has released advice for businesses in the South and Thames Valley which may be affected by the COVID-19 pandemic.
It includes a number of action points and advice from Garry Lee, chair of R3’s Southern & Thames Valley committee.
The checklist is:
- form an emergency response committee – agree which senior staff will decide how your business responds to changes in circumstances
- know cashflow - make sure you have your cashflow figures to hand, maintain short-term weekly cashflow forecasts
- negotiate with suppliers or creditors - now is the time to open negotiations with suppliers and/or creditors, will they accept new terms or deferred payment plans?
- check eligibility for Government support – explore what you’re eligible for and how you can access it
- keep on top of employment contracts – do staff contracts reflect the current climate and covers new duties, changed work schedules, or reduced benefits?
- Communicate – open and honest communication will be vital in maintaining key relationships
- check and clarify insurance terms – check what’s covered and, if you can, have a conversation with your brokers or insurers to clarify
- seek reputable advice – the earlier, the better
Lee, who is a senior manager in the recovery and restructuring services team at accountancy firm Smith and Williamson’s Southampton office, urged firms to consider the help available.
He said: “There’s a massive amount of support available right now for businesses of all sizes in the South and Thames Valley.
“For many it could be an enormous help, and for some it may be the fundamental difference between success and failure.
“The best first step is to research what’s available and understand how you can apply for any relevant support, so you know how and where you can access support, and the kind of timescales that are likely to be involved.
“And, it will payback many times over to get professional advice to guide you through the process.”
Businesses starting to struggle have been advised that early advice from an insolvency practitioner or reputable restructuring professional can make the world of difference.
Lee said: “Any directors or business owners whose businesses are in difficulty or are starting to see signs that it may struggle should seek professional advice as early as possible.
“Early advice and early discussions with creditors give you a greater range of options to find and implement solutions to the challenges you face and enable you to make a considered decision, rather than a rushed one.
“Good advice can also protect you from personal liability if the business fails.”
Businesses can access the full coronavirus advice guide on the R3 website at https://www.r3.org.uk/press-policy-and-research/news/more/29370/page/1//
